CONFISCATION OF PROCEEDS OF CRIME

In NSW there are a number of applications that can be made for the confiscation of proceeds of crime. There are also a number of other Acts under which assets can be seized for example, an asset forfeiture order under the Criminal Assets Recovery Act 1990 (NSW) or under the Proceeds of Crime Act 1987 and 2002 (Cth) however, this article will concentrate only upon the Confiscation of Proceeds of Crimes Act 1989 (NSW) ‘the Act’. The applications that can be made (see s13 of the Act below) for confiscation under this Act are as follows:

a forfeiture order against property that is tainted property (as defined below) in respect of the offence; and/or

a pecuniary penalty order against the person in respect of benefits derived by the person from the commission of the offence.

Or where convicted of a drug trafficking offence:

a forfeiture order against property that is tainted property in respect of any drug trafficking offences; and/or

a drug proceeds order against the person in respect of benefits derived by the person from the commission of any drug trafficking offences.

In an application for a forfeiture order against property that is tainted the court must take into account inter alia, the ordinary or intended use of the property and any hardship that may reasonably be likely to arise to that or any other person following the making of the order (see s18(1)(b)(i) and (ii) and R v Wealand [2002] NSWCCA 471 per Kirby J below). Once these factors have been taken into consideration the court has a discretion whether to make a forfeiture order or not.

Where the application is made for confiscation in respect of benefits derived from drug trafficking - the court can have regard to statements (oral or written) by a police or customs officer as to the market value or range of amounts ordinarily paid for the same or substantially similar substance (see s31A of the Act below). When looking at the value of the proceeds of the drug trafficking - any expenses or outgoings of the defendant in connection with the commission of the offence or offences must not be deducted (s30(6) of the Act below).

The relevant provision of the Act are set out below.

"tainted property" means property that:

(a) was used in, or in connection with, the commission of a serious offence, or

(b) was substantially derived or realised, directly or indirectly, by any person, from property used in, or in connection with, the commission of a serious offence, or

(c) was substantially derived or realised, directly or indirectly, by any person, as a result of the commission of a serious offence, or

(d) was substantially derived or realised, directly or indirectly, by any person for the depiction of a serious offence, or the expression of the offender’s thoughts, opinions or emotions regarding the offence, in any public promotion.

7 Meaning of “serious offence” and “serious drug offence”

"serious drug offence" means:

(a) an offence referred to (before the commencement of the Drug Misuse and Trafficking Act 1985 ) in section 45A of the Poisons Act 1966 :

(i) of supplying any drug of addiction or prohibited drug within the meaning of that Act, or

(ii) of cultivating, supplying or possessing any prohibited plant within the meaning of that Act, or

(iii) of permitting any premises, as owner, occupier or lessee of the premises, to be used for the purpose of the cultivation or supply of any prohibited plant within the meaning of that Act or of being concerned in the management of any such premises, or

(b) a drug trafficking offence, or

(c) a prescribed offence involving drugs or an offence of a prescribed kind involving drugs, or

(d) an offence, which involves theft, fraud, obtaining financial benefit by vice engaged in by others, extortion, violence, bribery, corruption or harbouring criminals, committed in connection with an offence referred to in paragraph (a), (b) or (c), or

(e) an offence under section 193B (money laundering) or 193D (dealing with property that subsequently becomes an instrument of crime) of the Crimes Act 1900 in relation to the proceeds of an offence, or an offence, referred to in paragraph (a), (b), (c) or (d), or

(f) an offence of attempting to commit, or of conspiracy or incitement to commit, an offence referred to in paragraph (a), (b), (c), (d) or (e).

"serious offence" means:

(a) an offence (including a common law offence) against the laws of New South Wales, being an offence that may be prosecuted on indictment, or

(b) the offence of supplying any restricted substance prescribed for the purposes of section 16 of the Poisons and Therapeutic Goods Act 1966 that arises under section 18A (1) of that Act, or

(c) an offence prescribed for the purposes of this paragraph by the regulations or an offence of a kind so prescribed.

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 13

13 Applications for confiscation orders

(1) If a person is convicted of a serious offence other than a drug trafficking offence, an appropriate officer may apply to an appropriate court for one or both of the following orders:

(a) a forfeiture order against property that is tainted property in respect of the offence,

(b) a pecuniary penalty order against the person in respect of benefits derived by the person from the commission of the offence.

(2) If a person is convicted of a drug trafficking offence, an appropriate officer may apply to an appropriate court for one or both of the following orders:

(a) a forfeiture order against property that is tainted property in respect of any drug trafficking offences,

(b) a drug proceeds order against the person in respect of benefits derived by the person from the commission of any drug trafficking offences.

(3) An application must be made before the end of the relevant period in relation to the conviction, except with the leave of the Supreme Court.

(3A) The Supreme Court must not grant leave under subsection (3) unless:

(a) the property or benefit to which the application relates is:

(i) property of the kind referred to in paragraph (d) of the definition of "tainted property" in section 4 (1), or

(ii) a benefit of the kind referred to in section 25 (2) (a1) or 30 (1) (b), and

(b) the Court is satisfied that:

(i) the property or benefit was derived, realised or identified only after the end of the relevant period, or

(ii) necessary evidence became available only after the end of that period, or

(iii) it is otherwise in the interests of justice to do so.

(4) An application may be made under subsection (1) (b) in relation to one or more serious offences.

(5) If an application under subsection (1) or subsection (2) has been finally determined, no further application may be made under that subsection in relation to the same conviction, except with the leave of the Supreme Court or in such circumstances as are prescribed.

(6) The Supreme Court shall not grant leave unless satisfied that:

(a) the tainted property, or the benefit, to which the new application relates was identified only after the first application was determined, or

(b) necessary evidence became available only after the first application was determined, or

(c) the Court is otherwise satisfied that it is in the interests of justice to grant the leave.

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 18

18 Forfeiture orders

(1) If a person has been convicted of a serious offence and an application is made to a court under section 13 (1) (a) or (2) (a) in relation to specified property and:

(a) the court is satisfied that the property is tainted property in relation to the offence, and

(a1) if the application relates to property of the kind referred to in paragraph (d) of the definition of "tainted property" in section 4 (1)-the court is satisfied that, having regard to subsection (1A), it is appropriate to treat the property as having been derived or realised by the defendant (or by a person at the request or by the direction of the defendant) because of the commission of a serious offence, and

(b) the court has taken into consideration (having regard to information before the court):

(i) the use that is ordinarily or had been intended to be made of the property, and

(ii) any hardship that may reasonably be likely to arise (whether on the part of that or any other person) following the making of the order,

the court may order that the property is forfeited to the State.

(1A) In considering whether to treat property of the kind referred to in paragraph (d) of the definition of "tainted property" in section 4 (1) as property derived or realised by the defendant (or by a person at the request or by the direction of the defendant) because of the commission of a serious offence, a court may have regard to any matter that it thinks fit, including:

(a) whether or not it is in the public interest to treat it as such property, and

(b) whether or not the depiction of the offence, or the expression of the defendant’s thoughts, opinions or emotions regarding the offence, in the public promotion for which the property was derived or realised has any general social or educational value, and

(c) the nature and purposes of the public promotion for which the property was derived or realised, including its use for research, educational or rehabilitative purposes.

(2) In considering any hardship that may be likely to arise on the part of a person convicted of a serious offence, the court shall not take into account the sentence imposed in respect of the offence.

(2A) In considering any hardship reasonably likely to arise on the part of an Aboriginal person or a Torres Strait Islander convicted of a serious offence, the court must take into account responsibilities arising from the person’s ties to extended family and kinship.

(3) If the court orders that property (other than money) is forfeited to the State, the court shall specify in the order the amount that it considers to be the value of the property at the time when the order is made.

(4) If, at the hearing of an application made under section 13 (1) (a) or (2) (a) in reliance on the conviction of a person for a serious offence, evidence is given that property to which the application relates was in the possession of the person at or immediately after the commission of the offence, then:

(a) if there is no evidence given tending to show that the property was not used in, or in connection with, the commission of the offence-the court shall presume that the property was used in, or in connection with, the commission of the offence, or

(b) in any other case-the court shall not make an order under this section in relation to the property unless it is satisfied, on the balance of probabilities, that the property was used in, or in connection with, the commission of the offence.

(5) A court making a forfeiture order in respect of property may specify in the order the extent of the estate, interest or rights in the property that are affected by the order and, where the order is to apply to land, the court shall do so.

Pecuniary Orders

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 24

24 Pecuniary penalty orders

(1) If a person has been convicted of a serious offence other than a drug trafficking offence and an application is made under section 13 (1) (b) for an order in respect of the offence, the court may:

(a) assess, in accordance with section 25, the value of the benefits derived by the person because of having committed the offence, and

(b) order the person to pay to the State a pecuniary penalty equal to the value so assessed.

(2) If:

(a) property that is the proceeds of the offence has been forfeited under this Act or a law of the Commonwealth, a Territory or another State, or

(b) a forfeiture order is proposed to be made against property that is proceeds of the offence,

the pecuniary penalty to be paid shall be taken to be reduced by an amount equal to the value of the property as at the time of the making of the order under this section.

(3) If:

(a) a court makes an order under this section in relation to an offence, and

(b) in calculating the penalty amount, the court took into account a proposed forfeiture order in respect of property, and

(c) an appeal against the forfeiture order is allowed or the proceedings for the proposed forfeiture order terminate without the proposed forfeiture order being made,

an appropriate officer may apply to the court for a variation of the order to increase the penalty amount by the value of the property and the court may, if it considers it appropriate to do so, vary the order accordingly.

(4) An amount payable by a person to the State in accordance with an order made under this section shall, for all purposes, be taken to be a civil debt due by the person to the State.

(5) An order made by a court under this section may be enforced as if it were an order made by the court in civil proceedings instituted by the State against the person to recover a debt due by the person to the State.

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 25

25 Assessment of pecuniary penalty

(1) In this section:

"offence period", in relation to an application under section 13 (1) (b) made in reliance on the conviction of a person for 2 or more serious offences, means the period commencing when the earliest of those offences was committed and ending when the latest of those offences was committed.

(2) For the purposes of an application for a pecuniary penalty order against a person (in this section called the "defendant"), the value of the benefits derived by the defendant because of having committed a serious offence or serious offences shall be assessed by a court having regard to information before the court concerning all or any of the following matters:

(a) the money, or the value of the property other than money, that came into the possession or under the control of:

(i) the defendant, or

(ii) another person at the request or by the direction of the defendant,

because of the defendant’s having committed the offence or any of the offences,

(a1) subject to subsection (2A), the value of any benefit that was provided for the defendant (or for another person at the request or direction of the defendant) for the depiction of the offence or offences, or the expression of the defendant’s thoughts, opinions or emotions regarding the offence or offences, in any public promotion,

(b) the value of any benefit, other than a benefit of the kind referred to in paragraph (a) or (a1), that was provided for:

(i) the defendant, or

(ii) another person at the request or by the direction of the defendant,

because of the defendant’s having committed the offence or any of the offences,

(c) if the offence or any of the offences consisted of the doing of an act or thing in relation to a prohibited drug or prohibited plant as respectively defined in the Drug Misuse and Trafficking Act 1985 :

(i) the market value, at the time of the offence, of similar or substantially similar substances, and

(ii) the amount that was, or the range of amounts that were, ordinarily paid for the doing of a similar or substantially similar act or thing,

(d) the value of the defendant’s property:

(i) if the application relates to a single serious offence-before and after the commission of the offence, or

(ii) if the application relates to 2 or more serious offences-before, during and after the offence period,

(e) the defendant’s income and expenditure:

(i) if the application relates to a single offence-before and after the commission of the offence, or

(ii) if the application relates to 2 or more offences-before, during and after the offence period.

(2A) In considering whether to treat a benefit of the kind referred to in subsection (2) (a1) as a benefit derived by the defendant because of having committed a serious offence or serious offences, a court may have regard to any matter that it thinks fit, including:

(a) whether or not it is in the public interest to treat it as such a benefit, and

(b) whether or not the depiction of the offence or offences, or the expression of the defendant’s thoughts, opinions or emotions regarding the offence or offences, has any general social or educational value, and

(c) the nature and purposes of the public promotion for which the benefit was provided, including its use for research, educational or rehabilitative purposes.

(2B) If a court is satisfied that part (but not all) of a public promotion relates to a depiction or an expression of the kind referred to in subsection (2) (a1), the court may, for the purposes of section 24, treat the value of the benefit derived by the defendant because of having committed an offence as being such proportion of the total value of any benefit derived by the defendant for the promotion as seems just and equitable to the court in the circumstances.

(3) If, at the hearing of an application for a pecuniary penalty order against a defendant in relation to a serious offence or serious offences, evidence is given that the value of the defendant’s property:

(a) after the defendant committed the serious offence, or

(b) during and after the end of the offence period,

exceeded the value of the defendant’s property before the defendant committed the serious offence or before the commencement of the offence period then, for the purposes of section 24, the court shall, subject to subsection (4), treat the value of the benefits derived by the defendant because of having committed the offence or offences as being not less than the amount of the excess.

(4) If, after evidence has been given at the hearing of an application for a pecuniary penalty order against a defendant in relation to a serious offence or serious offences that the value of the defendant’s property:

(a) after the defendant committed the serious offence, exceeded the value before the serious offence was committed, or

(b) after the end of the offence period, exceeded the value before the commencement of the offence period,

the defendant satisfies the court that the whole or a part of the excess was due to causes unrelated to the commission of the offence or offences:

(c) if the defendant so satisfies the court in respect of the whole of the excess-subsection (3) does not apply to the excess, or

(d) if the defendant so satisfies the court in respect of a part of the excess-subsection (3) applies to the excess as if it were reduced by the amount of that part.

(5) In calculating, for the purposes of an application for a pecuniary penalty order against a defendant in relation to a serious offence or serious offences, the value of benefits derived by the defendant because of having committed the offence or offences, any expenses or outgoings of the defendant in connection with the commission of the offence or offences shall not be deducted.

(6) This section applies to and in relation to property that comes into the possession or under the control of a person either within or outside New South Wales, and to benefits that are provided for a person either within or outside New South Wales.

(7) At the hearing of an application for a pecuniary penalty order against a defendant in relation to a serious offence or serious offences:

(a) a member of the Police Force, or

(b) a member of the Australian Federal Police, or

(c) a Customs officer,

who is experienced in the investigation of indictable offences under, or similar to offences under, the Drug Misuse and Trafficking Act 1985 may testify, to the best of his or her information, knowledge and belief:

(d) with respect to the amount that was the market value of a prohibited drug or prohibited plant as respectively defined in that Act at a particular time or during a particular period, or

(e) with respect to the amount, or the range of amounts, ordinarily paid at a particular time, or during a particular period, for the doing of an act or thing in relation to such a prohibited drug or prohibited plant,

despite any rule of law or practice relating to hearsay evidence and the testimony shall, in the absence of evidence to the contrary, be evidence of the matter testified to.

Drugs and confiscation orders

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 29

29 Drug proceeds orders

(1) If an application is made for a drug proceeds order against a person (in this Division called the "defendant") convicted of a drug trafficking offence, the court must:

(a) determine whether the defendant has derived any benefit in connection with drug trafficking at any time, and

(b) if the court believes the defendant has so benefited, assess the value of any such benefit, and

(c) order the defendant to pay to the State a pecuniary penalty equal to the amount so assessed.

(2) If:

(a) property that is the proceeds of drug trafficking has been forfeited under this Act or a law of the Commonwealth, a Territory or another State, or

(b) a forfeiture order is proposed to be made against property that is proceeds of drug trafficking,

the pecuniary penalty to be made is taken to be reduced by an amount equal to the value of the property as at the time of the making of the forfeiture order.

(3) If:

(a) a court makes an order under this section in relation to an offence, and

(b) in calculating the penalty amount, the court took into account a proposed forfeiture order in respect of property, and

(c) an appeal against the forfeiture order is allowed or the proceedings for the proposed forfeiture order terminate without the proposed forfeiture order being made,

an appropriate officer may apply to the court for a variation of the order to increase the penalty amount by the value of the property and the court may, if it considers it appropriate to do so, vary the order accordingly.

(4) An amount payable by a defendant to the State in accordance with an order made under this section is, for all purposes, taken to be a civil debt due by the defendant to the State.

(5) An order made by a court under this section may be enforced as if it were an order made by the court in civil proceedings instituted by the State against the defendant to recover a debt due by the person to the State.

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 30

30 Assessment of proceeds of drug trafficking

(1) A court is to assess the benefits (if any) derived in connection with drug trafficking by having regard to information before the court concerning all or any of the following matters:

(a) the money, or the value of property other than money, that came into the possession or control of the defendant, or another person at the request or by the direction of the defendant, at any time in connection with drug trafficking by the defendant,

(b) the value of any benefit that was provided for the defendant, or for another person at the request or direction of the defendant, in respect of the defendant’s involvement or participation in a public promotion relating to drug trafficking (or such part of the value of the benefit as is commensurate with the proportion of the defendant’s involvement or participation that is concerned with drug trafficking),

(c) the value of any benefit, other than a benefit of a kind referred to in paragraph (a) or (b), that was provided for the defendant, or another person at the request or by the direction of the defendant, because of drug trafficking by the defendant,

(d) the market value, at the time of the drug trafficking, of substances similar or substantially similar to the prohibited drug or prohibited plant involved in the drug trafficking offence or offences,

(e) the amount that was, or the range of amounts that were, ordinarily paid for the doing of an act or thing similar or substantially similar to the doing of the act or thing constituting the drug trafficking,

(f) the value of the defendant’s property appearing to the court:

(i) to have been held by the defendant at any time since his or her conviction, or

(ii) to have been transferred to the defendant at any time since the beginning of the period of 6 years that ended when the proceedings were instituted against the defendant,

(g) the value of the defendant’s income and expenditure:

(i) at any time since his or her conviction, or

(ii) at any time since the beginning of the period of 6 years that ended when the proceedings were instituted against the defendant.

(2) In considering whether to treat a benefit of the kind referred to in subsection (1) (b) as a benefit derived in connection with drug trafficking, a court may have regard to any matter that it thinks fit, including the public interest and any research, educational or rehabilitative purpose of the public promotion concerned.

(3) If evidence is given that the value of the defendant’s property or the defendant’s income or expenditure:

(a) after the defendant committed drug trafficking offences, or

(b) during and after the end of the period of 6 years that ended when proceedings for the drug trafficking offences were last instituted against the defendant,

exceeded the value of the defendant’s property or income or expenditure before the defendant committed the drug trafficking offences or before the commencement of that period then the court must treat the value of the benefits derived by the defendant because of drug trafficking by the defendant as being not less than the amount of the excess.

(4) Subsection (3) does not apply to the whole or a part of the excess referred to in that subsection if the defendant satisfies the court that it was due to causes unrelated to drug trafficking or the commission of other serious offences.

(5) For the purposes of assessing the value of the proceeds of drug trafficking in a case where a drug proceeds order has previously been made against the defendant, the court must leave out of account any of the defendant’s proceeds of drug trafficking that are shown to the court:

(a) to have been taken into account in determining the amount to be recovered in respect of drug trafficking under a previous drug proceeds order or pecuniary penalty order, or

(b) to have been recovered under an order made under the Criminal Assets Recovery Act 1990 .

(6) In assessing the value of the proceeds of drug trafficking of a defendant convicted of a drug trafficking offence or offences, any expenses or outgoings of the defendant in connection with the commission of the offence or offences must not be deducted.

(7) This section applies to and in relation to property that comes into the possession or under the control of a person either within or outside New South Wales, and to benefits that are provided for a person either within or outside New South Wales.

CONFISCATION OF PROCEEDS OF CRIME ACT 1989 - SECT 31A

31A Evidence as to value of drugs and other matters

(1) In proceedings for an application for a drug proceeds order, a member of the NSW Police Force, a member of the Australian Federal Police or a Customs officer may give evidence (whether in person or in a statement tendered to the court by the prosecution under this Division):

(a) as to the market value, at the time of a drug trafficking offence in relation to a substance, or substantially similar substances, and

(b) as to the amount, or the range of amounts, ordinarily paid for the doing of a similar or substantially similar act or thing to the offence.

(2) The evidence may be given by a person who is experienced in the investigation of indictable offences under (or similar to offences under) the Drug Misuse and Trafficking Act 1985 .

(3) Any such person may give evidence, to the best of his or her information, knowledge and belief:

(a) as to the amount that was the market value of a prohibited drug or prohibited plant within the meaning of the Drug Misuse and Trafficking Act 1985 at a particular time or during a particular period, or

(b) as to the amount, or the range of amounts, ordinarily paid at a particular time, or during a particular period, for the doing of an act or thing in relation to any such prohibited drug or prohibited plant,

despite any rule of law or practice relating to hearsay evidence and the testimony is, in the absence of evidence to the contrary, evidence of the matter testified to.

R v Wealand [2002] NSWCCA 471 (4 December 2002)

Last Updated: 4 December 2002

NEW SOUTH WALES COURT OF CRIMINAL APPEAL

CITATION: Regina v Wealand [2002] NSWCCA 471

FILE NUMBER(S):

60090/02

HEARING DATE(S): 27/11/02

JUDGMENT DATE: 04/12/2002

PARTIES:

Regina (Appl)

David Ralph Wealand (Resp)

JUDGMENT OF: Spigelman CJ Sully J Kirby J

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): 01/71/0090

LOWER COURT JUDICIAL OFFICER: Woods ADCJ

COUNSEL:

P J P Power SC (Appl)

M Buscombe (Resp)

SOLICITORS:

S E O'Connor (Appl)

Peter Ash & Assocs (Resp)

CATCHWORDS:

CRIMINAL PRACTICE & PROCEDURE

Crown appeal against dismissal of forfeiture application

Confiscation of Proceeds of Crime Act 1989

Meaning of 'hardship'

Whether Judge took account of sentence imposed (s18(2))

LEGISLATION CITED:

Confiscation of Proceeds of Crime Act 1989

Drug Misuse and Trafficking Act 1985

DECISION:

Appeal dismissed

JUDGMENT:

IN THE COURT OF

CRIMINAL APPEAL

60090/02

SPIGELMAN CJ

SULLY J

KIRBY J

Wednesday 4 December 2002

REGINA v David Ralph WEALAND

Judgment

1 SPIGELMAN CJ: I agree with Kirby J.

2 SULLY J: I agree with Kirby J.

3 KIRBY J: The Crown appeals under s92(4) of the Confiscation of Proceeds of Crime Act 1989 ("the Act") against the refusal by Woods ADCJ to make an order forfeiting certain property of David Ralph Wealand, which was said to be tainted property.

Background

4 On 28 July 1998, Mr Wealand and his wife purchased (as joint tenants) a home unit above a newsagency in Wagga Wagga (1/30 Fitzmaurice Street, Wagga Wagga). They paid the sum of $30,000.

5 On 12 February 2001, the police at Wagga Wagga executed a search warrant upon these premises. Mr Wealand was present throughout. Indeed, he took the police from room to room, making full admissions concerning the cultivation by him of a significant number of cannabis plants within the premises. Some of the plants were seedlings, some mature, and some were known as "mother plants". They had been grown hydroponically, with the aid of equipment which Mr Wealand had installed.

6 Mr Wealand had purchased the equipment in Melbourne. He began cultivation at the end of 1998. He said that his purpose in the beginning was to cultivate enough marijuana for his own use and that of his wife. At that time he smoked marijuana every day, as did his wife. Indeed, he asserted that he did so partly as an analgesic, to alleviate pain from arthritis, and partly as a substitute for alcohol. There was evidence that he had suffered a serious motor cycle accident and had arthritis. Mr Wealand explained this his father had been an alcoholic. He feared his own attraction to alcohol.

7 Mr Wealand acknowledged that in time he expanded the operation. He volunteered to the police that he had sold three "decent crops", earning, perhaps, $4000 or $5000. The equipment had cost him between $5000 and $6000.

8 Mr Wealand was charged with four counts under s23(1) and s25(1) of the Drug Misuse and Trafficking Act 1985. Two counts related to the cultivation of cannabis plants at different times (50 plants at one time and 132 at another), and two counts of supply of cannabis leaf, again relating to different periods. The maximum penalty in respect of each count was ten years. Mr Wealand pleaded guilty, asking his Honour to take into account six additional matters on a Form 1 (two relating to the cultivation of cannabis and four relating to the supply of cannabis leaf). Mr Wealand was sentenced by Woods ADCJ on 8 February 2002 in respect of each count to three years imprisonment, with a non parole period of 18 months, each sentence to be concurrent.

9 Mrs Wealand had some knowledge of the operation. She was charged with the cultivation and possession of cannabis. She pleaded guilty. Ultimately, on appeal, she was required to enter a good behaviour bond for a period of twelve months.

Application for Forfeiture

10 Under s13(2) of the Confiscation of Proceeds of Crime Act 1989, where a person has been convicted of a "drug trafficking offence" (as defined in s4), an application may be made for a forfeiture order against property that is "tainted in respect of the offence". "Tainted property" is defined to include property "used in or in connection with the commission of a serious offence" (s4). A "serious offence" includes an offence that may be prosecuted on indictment (s7).

11 Mr Wealand, therefore, had been convicted of serious drug offences. The Crown then made application for an order of forfeiture of the unit, 1/30 Fitzmaurice Street, Wagga Wagga. It also sought the forfeiture of the hydroponic and other equipment within the unit. Mr Wealand did not resist the latter. However, he opposed the forfeiture of the home unit.

12 The power of the Court to order the forfeiture of tainted property is set out in s18 of the Act. That section, relevantly, is in these terms:

"s18 Forfeiture orders

(1) If a person has been convicted of a serious offence and an application is made to a court under section 13(1)(a) or (2) in relation to specified property and:

(a) the court is satisfied that the property is tainted property in relation to the offence, and

(b) the court has taken into consideration (having regard to information before the court):

(i) the use that is ordinarily or had been intended to be made of the property, and

(ii) any hardship that may reasonably be likely to arise (whether on the part of that or any other person) following the making of the order;

the court may order that the property is forfeited to the State.

(2) In considering any hardship that may be likely to arise on the part of a person convicted of a serious offence, the court shall not take into account the sentence imposed in respect of the offence.

(3) If the court orders that property (other than money) is forfeited to the State, the court shall specify in the order the amount that it considers to be the value of the property at the time when the order is made."

13 There was no question that the property was tainted property. The issue on the application was the ordinary or intended use of the property and any hardship that may attend the making of a forfeiture order.

The Intended Use of the Property

14 Mr Wealand gave evidence on sentence. He also gave evidence on the forfeiture application. On both occasions he was cross examined in respect of his assets. He produced his bank records.

15 Mr Wealand was born in March 1955. He is aged 47 years. He had no criminal record before his conviction for these offences. He and his wife established a florist business in Wagga Wagga in 1988. They sold the business in 1997. Instead of reducing the mortgage on their home, they purchased in July 1998, on advice from their accountant, the unit above the newsagency, 1/30 Fitzmaurice Street, Wagga Wagga. They then spent the sum of $10,000 renovating the unit. The unit was placed in the hands of Raine and Horne, Real Estate Agents. A letter from that firm confirmed that between July and November 1998, it had attempted to find a tenant, without success. It was after November 1998 that Mr Wealand began using the property to cultivate cannabis. His Honour found that the property had been purchased as an investment property. He also found that there was no evidence that the unit, or other assets of Mr Wealand or his wife, had been purchased with the proceeds of the cultivation or supply of cannabis.

Hardship

16 Mr Wealand described in detail his present circumstances. I need not repeat that detail. It is enough to say that there was evidence which, if accepted, was capable of suggesting significant hardship.

17 First, Mr Wealand's adult step-son was disabled. He had suffered brain damage at birth. He had also had certain difficulties at school which had given rise to a court case. He required long-term psychiatric care. He suffered from depression. He had attempted suicide. His behaviour was disturbed. That behaviour had had a profound effect upon the family, and especially Mr Wealand's wife, who had herself become ill.

18 Secondly, following his arrest, Mr Wealand lost his job as a bus driver. Although he had lived in Wagga Wagga all his life, he felt obliged to move elsewhere. He and his wife sold their home. They purchased a home in Tuross Heads, with a view to offering accommodation as a Bed and Breakfast. Their return on that business, however, had been extremely modest. They had survived financially, partly with the assistance of a pension received by Mr Wealand's step-son, and partly through an allowance received by Mrs Wealand to assist in the establishment of the business.

19 Mr Wealand gave evidence of other property interests. Before his arrest, a home had been purchased for his step-son at Trevor Street, Wagga Wagga. The home was valued at $130,000. The mortgage was $110,000. After his arrest, Mr Wealand's step-son moved back home. He now lives at Tuross Heads. At the time of the application before his Honour, the property in Wagga Wagga was rented. There was a shortfall between the rent and the mortgage payment. Mr Wealand gave evidence that he had hoped to rationalise his assets, and specifically, to sell the home unit above the newsagency in order to reduce the mortgage on Tuross Heads. The picture which emerged was of a family struggling to make ends meet.

His Honour's Judgment

20 Having heard the application, his Honour gave a ruling. He refused to order forfeiture, indicating that he would provide his reasons later. On 8 February 2002 his Honour published his reasons.

21 In his judgment, Woods ADCJ described the circumstances leading to Mr Wealand's arrest. He identified the offences for which he had been convicted. He described the circumstances in which the home unit had been purchased as an investment. His Honour referred to the substantial mortgage still owing at Tuross Heads. His Honour then said this:

"Now that the defendant is sentenced to a term of imprisonment there may be difficulty in his wife running the bed and breakfast business and keeping up payments to the Bank.

There is no evidence before me to suggest that any of these assets were themselves purchased with the proceeds of their cultivation and supply of cannabis, the only evidence being that what they made so far in the few sales referred to above had barely covered their costs.

The defendant has been sentenced to a term of imprisonment for the offences, so on the evidence before me I must consider that the viability of his and his wife's attempts to set up a new business in another town may be seriously affected. It is not enough to say that they are well off they have two houses albeit with a substantial mortgage and the overdraft one must always have rehabilitation and the ability to turn their life around in mind. So when considering the greater picture of their ability to rehabilitate and make a new life I must carefully consider the extra difficulty such a forfeiture could mean to people who are in their 40's with a difficult grown up son, who have not had any prior involvement with the law, have pleaded guilty and have expressed a desire to rehabilitate and make a fresh start. So without in any way down rating the need for such legislation as the Confiscation of Proceeds of Crime Act I find that this case is one where it is open to me to exercise a discretion not to order forfeiture because of hardship.

The application for forfeiture of the property being Unit 1, 30 Fitzmaurice Street, Wagga Wagga, is dismissed."

The Grounds of Appeal

22 The Crown suggested four errors:

· First, that his Honour had breached s18(2) of the Act.

· Secondly, that his Honour had given too much weight to the asserted impact of forfeiture on the rehabilitation of Mr Wealand and his wife.

· Thirdly, that his Honour had failed to give sufficient weight to the objective facts of the offence.

· Fourthly, that his Honour had failed adequately to consider other financial resources available to the respondent.

23 Section 92(4) of the Act provides to the Director of Public Prosecutions a right of appeal against a refusal by a court to make a forfeiture order. The section provides that "the Court of Criminal Appeal may, in its discretion, make such order as could have been made in the first instance".

24 The appeal is not a re-hearing. To succeed on this appeal, the Crown must demonstrate error. It is not enough that this Court may come to a different view on the facts (R v Lake (1989) 44 A Crim R 63, per Kirby P at 66; R v Galek (1993) 70 A Crim R 252, per Hunt CJ at CL at 258).

25 The second, third and fourth grounds are, in truth, an invitation to this Court to view the facts differently from the way in which they were viewed by his Honour. There was evidence capable of supporting the view his Honour formed. That view was not so plainly unreasonable and unjust that we should infer that his Honour was in error in failing properly to exercise the discretion he had (House v The King [1936] HCA 40; (1936) 55 CLR 499 at 505).

26 Returning to the first ground, it is convenient to repeat the words in the judgment which were said, in particular, to offend s18(2) of the Act. They were as follows:

"Now that the defendant is sentenced to a term of imprisonment there may be difficulty in his wife running the bed and breakfast business and keeping up payments to the Bank."

27 Before making a forfeiture order, the Court is required to consider any hardship "that may be reasonably likely to arise" from such an order. According to the section, the hardship may fall either upon the person convicted of the serious offence or "any other person" (s18(1)(b)(ii)). In respect of the person convicted, s18(2) operates. In considering the hardship that "may be likely to arise, the Court shall not take into account the sentence imposed in respect of the offence". A sentence involves the deprivation of liberty or other penalty imposed for breach of the criminal law. As such, it is a hardship deservedly imposed. However, it is irrelevant to an assessment of hardship under s18(1)(b)(ii) (cf R v Kalache [2000] NSWCCA 2, per Sully J, paras 43 to 77).

28 The forfeiture provisions of the Act are designed to cause a measure of hardship. In Taylor v Attorney-General for the State of South Australia (1991) 55 SASR 462, Debelle J said this, speaking of Parliament's intention with respect to an Act in similar terms: (at 473)

"Parliament has provided no guidelines as to how a court should exercise its discretion. It has adopted the process of forfeiture as a means of providing an additional deterrent to those minded to commit offences including drug offences. The clear intention of the Act is that, in addition to penalties which will be ordered in the ordinary course, not only will any ill-gotten gains be recoverable but, in addition, what is used in connection with the commission of the offence will be liable to forfeiture."

29 In the context of that objective, how is hardship to be assessed? Kirby P, in R v Lake (supra), made the following distinction: (at 66/67)

"In considering hardship, it is necessary to bear in mind that, of necessity, in achieving its objects, the Act will cause a measure of hardship in the deprivation of property. Indeed that is its intention. It is not that kind of hardship, therefore, that can give rise to the relief under s5(1)(b)(ii). The provision for relief on that ground must not be so interpreted as to frustrate the achieving of the purpose of Parliament in enacting the exceptional provisions of the Act. Something more than ordinary hardship in the operation of the Act is therefore meant. Otherwise the Act would have, within it, the seeds of its own ineffectiveness in every case."

"The loss of the value of the forfeited property, if a forfeiture order is made, could be hardship which is disproportionate to the offence which was committed. Would the court order forfeiture of a very valuable tract of bushland which was unused by the offender other than for the growing of one single cannabis plant?"

31 His Honour added: (at 127)

"Relevant hardship, however, the hardship which would follow the making of a forfeiture order, must be assessed in comparison with the offence which was committed. Hardship which well might deter the court from making a forfeiture order where the offence was growing one cannabis plant might well not deter the court where the offence was that of supplying a huge quantity of heroin."

32 In Taylor v Attorney-General for the State of South Australia (supra), the appellant and his wife had pleaded guilty to nine counts of selling cannabis. The nine occasions were representative of many others in a period of fourteen months. The sales had been made from their family home (described as "a shack") where they lived with their child. The Crown sought a forfeiture order in respect of that home. Debelle J said this: (at 475)

"The infinite variety of circumstances which might arise leads to a natural disinclination to suggest what other factors might affect the exercise of discretion. But, broadly speaking, in the exercise of its discretion, the court will have regard to the circumstances of the offence, the extent to which the property was connected with the commission of the offence, the seriousness of the offending, the value of the property in relation to the offence and the likely consequences of an order for forfeiture upon the offender and others who might be affected by the order."

33 His Honour reached the following view on the facts (King CJ and Millhouse J agreeing): (at 475)

"In this case, the shack was the only house property of the appellant, his wife and nine year old child, a circumstance to which the learned judge did not advert when exercising his discretion. Forfeiture of the shack property will not only result in the loss of his only asset but also of his home and the home of his family. The circumstances of this offence do not warrant the imposition of such a heavy burden upon the appellant or his family in addition to the other penalties already imposed upon him."

34 Here, his Honour was obliged to assess the hardship that may be likely to arise concerning Mr Wealand and his family if a forfeiture order were made. Mr Wealand and his wife had incautiously invested in the home unit, rather than reduce the mortgage on their family home. Mrs Wealand, in Mr Wealand's absence, was left with a business which was marginal, which was also the family home. In that context, counsel for Mr Wealand made the following submission:

"His Honour has simply had regard to the difficult financial and practical situation ... the respondent's wife and son would be placed in by virtue of the respondent's imprisonment, and the additional burden a forfeiture order would bring to both them and the respondent."

35 I agree with that submission. His Honour's judgment, read fairly, and as a whole, did not, in my view, breach s18(2) of the Act. He did not, in considering hardship, take into account the sentence imposed upon Mr Wealand. Rather, he considered the effect of forfeiting the unit in the context of the fragile economic circumstances of the Wealand family.